LIFE INSURANCE AND ANNUITIES (A) COMMITTEE Sunday, March 25, :00 3:30 p.m. Wisconsin Convention Center Ballroom A 1 st Floor ROLL CALL

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1 Date: 3/16/ Spring National Meeting Milwaukee, Wisconsin LIFE INSURANCE AND ANNUITIES (A) COMMITTEE Sunday, March 25, :00 3:30 p.m. Wisconsin Convention Center Ballroom A 1 st Floor ROLL CALL Doug Ommen, Chair Iowa James J. Donelon Louisiana Jillian Froment, Vice Chair Ohio Bruce R. Ramge Nebraska Jim L. Ridling Alabama Barbara D. Richardson Nevada Peter Fuimaono American Samoa Maria T. Vullo New York Dave Jones California Jon Godfread North Dakota Stephen C. Taylor District of Columbia Elizabeth Kelleher Dwyer Rhode Island Ralph T. Hudgens Georgia Allan L. McVey West Virginia Dean L. Cameron Idaho NAIC Support Staff: Jennifer R. Cook/Jolie H. Matthews AGENDA 1. Hear a Presentation on Generations Ahead Study Paul Kelash (Allianz) 2. Hear a Presentation on Life Insurance Innovation Farron Blanc (Reinsurance Group of America RGA) 3. Discuss the Work Plan for Retirement Security Charge Commissioner Doug Ommen (IA) 4. Hear a Presentation on the Issue with Designated Service Providers Joe Kizer (Resource Insurance Consultants) 5. Consider Adoption of its March 12 Minutes Commissioner Doug Ommen (IA) 6. Consider Adoption of its Subgroup, Working Group and Task Force Reports Commissioner Doug Ommen (IA) 7. Consider Adoption of Valuation Manual Amendments and Related Revisions to Actuarial Guideline 42 adopted by the Life Actuarial Task Force Mike Boerner (TX) 8. Discuss Any Other Matters Brought Before the Committee Commissioner Doug Ommen (IA) 9. Adjournment W:\National Meetings\2018\Spring\Agenda\A Cmte.docx 2018 National Association of Insurance Commissioners 1

2 Agenda Item 1: Hear a Presentation on Generations Ahead Study Paul Kelash (Allianz)

3 Allianz Life Insurance Company of North America The Allianz Generations Ahead Study Paul Kelash VP, Consumer Insights ENT-3142 (3/2018)

4 Allianz studies We conduct broad-based consumer research to gain insight into the U.S. population to help us and financial professionals communicate and serve consumers better 2010 and 2011 Reclaiming the Future Boomers after 2008 market 2014 Generations Apart Boomers and Gen X 2017 Generations Ahead Boomers, Gen X, Millennials 2

5 Allianz Generations Ahead Study Methodology Qualitative discussions and a broad-based quantitative survey 3,006 U.S. adults, ages Minimum household income of $30,000 Conducted in May 2017 BOOMERS BORN AGE N=1,000 GENERATION X BORN AGE N = 1,000 MILLENNIALS BORN AGE N=1,000 The Allianz Generations Ahead Study,

6 Broad study findings BOOMERS GEN X MILLENNIALS Famously labeled the Me generation, boomers are beginning to see the importance of retirement planning Struggling with debt and the emotional effect it is having on their long-term financial planning Exhibiting positive financial habits but social media and the fear of missing out (FOMO) are having an influence Fear running out of money in retirement more than death 63% The Allianz Generations Ahead Study,

7 Boomers retirement picture improving BOOMERS Finally feeling better about retirement, 72% feel financially prepared for retirement Up 15 percentage points from % 36% think it is impossible to determine retirement expenses an improvement from 60% in 2014 believe they lack the tools to figure out the retirement puzzle an improvement from 46% in 2014 The Allianz Generations Ahead Study, 2017 The Allianz Generations Apart Study,

8 Boomers are beginning to see the light In 2010, half of all boomers reported they were uncertain about when they could retire, if ever Today, 32% of boomers say uncertainty about their financial future makes it difficult to know when they can stop working Boomers today are more prepared BOOMERS The Allianz Generations Ahead Study, 2017 The Allianz Reclaiming the Future Study,

9 Boomers new frugality appreciation for Greatest Generation 64% of boomers ARE SAVERS 49% of Gen Xers 37% of millennials 61% always know exactly how much is in their accounts BOOMERS 25% describe themselves as penny-pinchers BOOMERS The Allianz Generations Ahead Study,

10 Boomers more serious about saving 65% SAVING for retirement is a basic necessity like food or housing BOOMERS $175k Median amount in retirement savings Highest of all generations 53% SAVING GEN X 58% SAVING MILLENNIALS 33% boomers have an additional $250k+ earmarked for life after work The Allianz Generations Ahead Study,

11 The trouble with Gen X - debt GEN X Uncertainty and growing mortgage and credit card debt, are having a negative effect on their long-term financial planning Total nonmortgage debt ($000 s) (student loans and credit cards) $20 $23 $11 $9 Nonmortgage 2014 Nonmortgage 2017 Boomers Gen Xers 49% admit to paying off only a partial amount on monthly credit card debt Up from 46% in 2014 The Allianz Generations Ahead Study, 2017 The Allianz Generations Apart Study,

12 Gen X emotional burden with debt HALF of Gen Xers believe they can t start saving for retirement until they pay off credit card debt 42% believe going into debt to handle day-to-day purchases is just a fact of life GEN X Generation X specific retirement worries 59% worry about maintaining their lifestyle in the future 55% unsure where their income will come from as they get older 61% find the thought of providing for themselves and their family in the long term overwhelming The Allianz Generations Ahead Study,

13 Gen X feeling unprepared LEAST confident MOST unprepared 44% 34% 41% Boomers Gen Xers 28% 37% 26% Millennials Confident in ability to manage their money well Financially speaking, I feel totally unprepared for retirement Heads in the Sand approach Everything will just work out 53% 63% Figure it out when we get there 46% 53% The Allianz Generations Ahead Study, 2017 The Allianz Generations Apart Study,

14 Millennials on the right track for now MILLENNIALS Millennials making good financial progress, but influences of social media pose risks $35k Median amount in retirement savings Same amount as Gen X 72% Prepared for retirement Confident income will last a lifetime 67% 63% 58% 74% 76% Boomer Gen X Millennial The Allianz Generations Ahead Study,

15 Millennials confident with funding life goals 66% Say they are much better with money than their parents were 41% set money aside each month for savings Confidence to fund life goals 36% Gen Xers Uncomfortable with debt because they saw their parents struggle with it 65% 67% 64% 78% Boomer Gen X Millennial The Allianz Generations Ahead Study,

16 Millennials use creativity with financial tools 70% of MILLENNIALS Set up tricks to help save money Set up different accounts for different goals 71% The Allianz Generations Ahead Study,

17 Millennials worrisome behaviors 63% SPENDERS MILLENNIALS 50% Spend more on going out than rent or mortgage 16% of boomers 17% Spend money as soon as I get it 6% of boomers Risks of social media 57% spent money they hadn t planned due to social media feeds 55% experienced FOMO (fear of missing out) The Allianz Generations Ahead Study,

18 Final thoughts BOOMERS GEN X MILLENNIALS More confident in their retirement readiness, new-found frugality, and on the right track to financial preparedness Hindered by debt and a heads in the sand mentality, need the most help in addressing retirement planning Exhibiting positive financial habits and embracing technology, but social media is having a concerning influence 16

19 Thank you. Questions? Guarantees are backed by the financial strength and claims-paying ability of issuing company. Variable annuity guarantees do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions. Products are issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN In New York, products are issued by Allianz Life Insurance Company of New York, 28 Liberty Street, 38th Floor, New York, NY Variable products are distributed by their affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN Only Allianz Life Insurance Company of New York is authorized to offer annuities and life insurance in the state of New York.

20 Agenda Item 2: Hear a Presentation on Life Insurance Innovation Farron Blanc (Reinsurance Group of America RGA)

21 The pace of innovation is fundamentally reinventing the concept of Insurance #ReinventLife 1 Proprietary & Confidential

22 Macro-economic forces are making it difficult for industry incumbents to capitalize on growth opportunities Difficult to reach market segments are being served via new approaches to distribution Disruptors are taking aim at incumbents with niche solutions Venture capitalists are arming disruptors with growth capital Incumbents are often ill-equipped to respond 2 Proprietary & Confidential

23 A robust investor ecosystem is making big bets at breakneck speed 3 Proprietary & Confidential

24 THE IMPLICATION FOR INCUMBENTS Traditionally, the corporate structure of Insurance incumbents has either slowed or outright prohibited innovation, leaving many left out of the innovation narrative. Why? Threat of risk to the core business Capital & expertise to jumpstart new ideas Market controlled by a few, large players 4 Proprietary & Confidential

25 RGA OVERVIEW - RGAx RGAx enables our partners to: Take unique approaches to solve modern business problems Create new institutional value Bring products and services to market faster Serving the traditionally underserved to live longer, healthier, more financial secure lives 5 Proprietary Green Shield & Confidential RFI Project Orchid Proprietary & Confidential

26 RGAx invests in core capabilities and assets, allowing our partners to reduce risk and accelerated growth. DIGITALLY DISTRIBUTE Manage best-in-breed capabilities for customer acquisition and new channel development Leverage third-party administration and white-labeled system development to create efficient fulfillment and operations MODEL & MEASURE Leverage hidden insights from partner data with highly sophisticated analysis and analytics tools Continually offer and refine customer engagement services that are highly relevant and personalized to meet customer needs MANAGE &SERVICE AMPLIFY & ENGAGE 6 Proprietary & Confidential

27 Insurance is, not! a) Bought, Sold b) Sold, Bought 7 Proprietary & Confidential

28 THE TRUSTED PERSONAL ADVISOR 8 Proprietary & Confidential

29 ON BEHALF OF THE TRUSTED INSTITUTIONS 9 Proprietary & Confidential

30 STEP 1: DESIGN PRODUCTS HUMANS WANT TO BUY 10 Proprietary & Confidential

31 STEP 1: DESIGN PRODUCTS HUMANS WANT TO BUY STEP 2: THERE IS NO STEP TWO 11 Proprietary & Confidential

32 Human Centered Design Observe Create Validate = Proprietary & Confidential

33 We have & will collaborate For example team of domestic mutual executives through a bespoke exercise to incubate & grow new insurance ideas. 1 Pre-Identification of business problems 4 Human-centered design sprint 5 Transfer of ideas and methodology 2 + RGAx Facilitators R 1-week on site at RGA HQ 3 TEAM CREATED R T T T T T T T T Exec team 13 Proprietary & Confidential

34 EXAMPLE: MIGRANTS PROTECTION 14 Proprietary & Confidential

35 15 Proprietary & Confidential

36 EXAMPLE: FAMILY (MATERNITY) LEAVE 16 Proprietary & Confidential

37 17 Proprietary & Confidential

38 We believe that for many incumbents it costs too much, and takes too long to bring new insurance propositions to market 18 Proprietary & Confidential

39 Greenhouse Insurance uses different starting points innovates on the core operate assumptions of carriers Incumbent life carriers Greenhouse Insurance Fully loaded cost model (set overhead & expense allowances) Waterfall development (sequential, minimizes wasted FTE time) Conservative management philosophy No upside for growing NB Huge downside for failures 2 nd /3 rd follower status Analysis paralysis Strong bias against not-built here solutions Marginal cost model (lean overhead, campaign allowances) Agile development (parallel, minimizes launch cycle time) Experimental management philosophy Rewarded on experimental NB growth Upside for quickly shutting down failures 1 st / pioneer status for all innovations Time boxed analysis Preference towards external partners / solutions 19 Proprietary & Confidential

40 RGAx has developed its own carrier specifically designed to enable our partners to innovate and create new opportunities. Needs Analysis Recommendation Quote Application E-sign Requirements Decision Compliance E-delivery Requirements Management Claims Distribution Platform Fulfillment Platform Business Processes New Ideas Lead Generation Agency Evidence Model Underwrite Delivery Policy Issuance INSIGHT modular 20 Proprietary & Confidential

41 CLOSING THOUGHTS: EIGHT TECH REVOLUTIONS THAT REORDER THE LIFE INSURANCE VALUE CHAIN InsureTech Blockchain Content Marketing Elder Tech Startup Speed Run for Your Life Distributed Ledger Penny Lane Virality of Content Paperback Writer Aging Economy When I m 64 Wearables / IoT Platform Markets AI/ML CRISPR-Cas9 Quantified Self I Me Mine Sharing Economy With a Little Help From my Friend Cognitive Computing One and One and One is Three Gene Editing Dr. Robert 21 Proprietary & Confidential

42 THANK YOU Farron Blanc

43 Agenda Item 3: Discuss the Work Plan for Retirement Security Charge.

44 Insured Retirement Institute 1100 Vermont Avenue, NW 10 th Floor Washington, DC t f March 23, 2018 Submitted Electronically to jcook@naic.org The Honorable Doug Ommen The Honorable Jillian Froment Commissioner, Iowa Insurance Division Director, Ohio Department of Insurance Chair, NAIC Life Insurance and Vice Chair, NAIC Life Insurance and Annuities (A) Committee Annuities (A) Committee Two Ruan Center 50 W. Town Street 601 Locust, 4th Floor Third Floor - Suite 300 Des Moines, IA Columbus, Ohio Re: Development of Workplan to Promote Retirement Security Dear Commissioner Ommen and Director Froment: On behalf of our members, the Insured Retirement Institute ( IRI ) 1 appreciates the opportunity to provide these comments to assist the National Association of Insurance Commissioners ( NAIC ) Life Insurance and Annuities (A) Committee (the Committee ) in its effort to develop a workplan to implement its charge to [e]xplore ways to promote retirement security consistent with the NAIC's continuing Retirement Security Initiative. IRI and our members commend you, the NAIC, and the Committee for the valuable steps already taken as part of the Retirement Security Initiative, and for recognizing the importance of this issue and seeking public input to help the NAIC as it considers how to proceed. In this letter, we will describe four specific steps the NAIC can take to promote retirement security: 1 IRI is the only national trade association that represents the entire supply chain of the retirement income industry. IRI has more than 500 member companies, including major life insurance companies, broker-dealers, banks, and asset management companies. IRI member companies account for more than 95 percent of annuity assets in the United States, include the top 10 distributors of annuities ranked by assets under management, and are represented by more than 150,000 financial professionals serving over 22.5 million households in communities across the country.

45 1. Developing a set of well-defined public policy objectives to advance this effort; 2. Supporting legislative and regulatory initiatives at the federal and state levels aimed at enhancing retirement security for all Americans; 3. Undertaking and/or participating in retirement security awareness campaigns; and 4. Taking action to protect seniors and other vulnerable segments of the population against financial fraud and exploitation. We would welcome the opportunitiy to discuss these suggestions with you and other members of the Committee in greater detail. 1. Outlining Public Policy Objectives. Promoting retirement security for all Americans is at the heart of everything we do here at IRI. Earlier this year, we unveiled our 2018 Retirement Security Blueprint, a copy of which is attached for your reference. The Blueprint outlines our public policy agenda for the year and guides our engagement with policymakers about ways to help individuals reach their financial goals and achieve a secure and dignified retirement. In particular, we are focused on: Maintaining and enhancing the current tax treatment for retirement savings; Expanding opportunities for retirement savings; Increasing access to lifetime income products; Helping savers make decisions about their finances; and Providing more resources to protect older Americans from financial exploitation. Each of these areas is described in greater detail in the Blueprint. We believe a similar set of key objectives would provide a framework within which the NAIC could seek to advance its own efforts to promote retirement security. 2. Legislative and Regulatory Initiatives. With the NAIC s policy objectives clearly defined, the next step could be to identify and support legislative and regulatory proposals, at both the state and federal levels, that align with those objectives. As outlined in the Blueprint, several bills have been introduced in Congress that are aimed at enhancing retirement security for all Americans. For example, the Retirement Enhancement and Savings Act of 2018 (H.R. 5282/S.2526) ( RESA ) is a comprehensive package of retirement proposals that would, among other things: Remove regulatory and legal barriers to make it easier for small businesses to participate in Multiple Employer Plans (MEPs); 2

46 Allow employers to give their employees access to annuity products provided by insurers that meet certain existing state insurance regulatory requirements, such as capital and reserving standards; Make lifetime income benefits for employees portable, so retirement plan participants do not lose benefits for which they have already paid when their employer makes certain changes to their plan; Give all retirement plan participants information about how their account balances could translate into retirement income, which will help them determine whether they are saving enough to achieve their retirement goals. Each of these provisions are also included in other bills pending before Congress, and we would strongly encourage the NAIC to review these measures as well as any retirement-related proposals by state legislatures or other regulatory bodies and publicly support those that are consistent with the NAIC s goals in undertaking this initiative. 3. Awareness Campaigns. IRI is proud to lead the National Retirement Planning Coalition (the NRPC ), a group of prominent financial industry associations, consumer organizations (such as America Saves, the Center for Retirement Research at Boston College, and the National Endowment for Financial Education), and regulatory bodies (including a number of state insurance and securities departments) dedicated to raising public awareness of the need for comprehensive retirement planning. Every year, the NRPC presents National Retirement Planning Week ( NRPW ), a week dedicated to this important subject. This year, NRPW will be held from April The NRPC has developed a comprehensive set of tools and resources to help its members and others educate Americans about the importance of retirement saving and planning. These tools and resources are available on the NRPC s website, For your convenience, we have attached to this letter (i) a copy of our Digital Toolkit, which provides an overview of NRPW, key messages, and key facts and figures, and (ii) a copy of our Policymaker Toolkit, which includes a sample press release, a sample op-ed, and other templates policymakers can use to participate in NRPW. The website also includes a sample social media plan for policymakers interested in promoting NRPW on Facebook and/or Twitter. NRPW could certainly serve as one vehicle for the NAIC and individual states to raise awareness among consumers about retirement saving and planning, and we would strongly urge you and your colleagues across the states to take advantage of the resources available on the NRPC s website. In fact, over the past several years, policymakers from more than 35 states (including insurance and securities departments, legislators, and mayors) have participated in NRPW to varying degrees. 3

47 In addition, the NAIC could consider establishing its own awareness campaign through which state insurance regulators conduct local events around the country designed to reach consumers directly. IRI would be very supportive of any such effort, and would be happy to assist the NAIC in developing its own retirement security week or month. 4. Protecting Seniors. The financial exploitation of older Americans is one of the most pressing issues our industry is facing. One-fifth of individuals between the ages of 71 and 79 have cognitive impairment. This increases to 50 percent between 80 and 89. Cognitive impairment opens the door to potential abuse and fraud. Costing a conservative estimate of $2.9 billion annually, the financial abuse and exploitation of at-risk older Americans has the potential to eliminate lifesavings and destabilize an individual s financial wellness. Identifying, preventing, and prosecuting financial abuse and fraud are all essential to ensuring financial security and dignity in retirement for millions of Americans. Recognizing the need for an ongoing initiative to raise awareness of financial abuse and to advocate for protective and preventive strategies to address exploitation and fraud, IRI has created a web-based resource center focused on protecting older Americans that features information for consumers, financial advisors, and financial services forms. In addition, we have held an annual Older Investors Summit for the past three years to convene all stakeholders for a forum to explore these issues, and we thank the NAIC for participating in these events. At all levels of government, legislatures and regulators are proactively seeking solutions and preventative measures to help at-risk Americans. For example, Congress is currently considering a measure known as the Senior$afe Act (S. 223 / H.R. 3758), which would encourage financial professionals to report suspected financial abuse or exploitation to the appropriate authorities. The NAIC has already publicly endorsed this measure in a letter to the bill sponsors in October 2017, and we would encourage you to consider supporting other legislative or regulatory proposals aimed at protecting seniors. In addition, we note that federal funding for adult protective services agencies would have been significantly cut under President Trump s proposed budget. We are working to maintain and, if possible, increase federal funding for these critically important services, and your support in these efforts would be most welcome. Looking ahead, IRI will be working to develop best practices and educational materials for consumers as well as financial and law-enforcement professionals on the signs and symptoms of abuse, and we will be undertaking new research projects focused on issues facing older Americans. We would be happy to explore ways to collaborate with the NAIC to raise awareness of this issues and what family members, friends and financial advisors can do if they suspect elder financial abuse or exploitation and any other efforts the NAIC may decide to take on in the coming months and years. 4

48 Conclusion IRI and our members share your commitment to raising public awareness of the importance of retirement saving and planning, and we look forward to working with the NAIC and the Committee as this effort takes shape. We will continue to think about other steps the NAIC might consider taking in furtherance of this objective. We hope the information and recommendations provided in this letter are helpful. If you have questions about anything in this letter, or if we can be of any further assistance in connection with this important effort, please feel free to contact me, IRI s Senior Vice President and General Counsel Lee Covington, or IRI s Vice President and Counsel for Regulatory Affairs, Jason Berkowitz. Thank you for your consideration. Sincerely, Catherine J. Weatherford President & CEO Insured Retirement Institute Cc: The Honorable Julie Mix McPeak, Tennessee Insurance Commissioner, NAIC President The Honorable Eric Cioppa, Maine Insurance Superintendent, NAIC President-Elect The Honorable Raymond Farmer, South Carolina Insurance Director, NAIC Vice President The Honorable Gordon Ito, Hawaii Insurance Commissioner, NAIC Secretary-Treasurer Mr. Michael Consedine, NAIC Chief Executive Officer 5

49 2018 RETIREMENT SECURITY BLUEPRINT 2018 Retirement Security Blueprint Americans face many challenges and obstacles in saving for retirement. In the past, many Americans relied on employer-based pension plans for retirement savings. Today, most Americans rely on other types of retirement savings plans such as 401(k) or Individual Retirement Accounts, which make individuals responsible for ensuring their own financial security during retirement. IRI s 2018 Retirement Security Blueprint includes common sense, bipartisan policies to help Americans achieve their retirement goals. IRI S 2018 BLUEPRINT WILL: 1. Maintain and enhance current tax treatment for retirement savings; 2. Expand opportunities to save for retirement by enhancing access and features of workplace retirement plans; 3. Increase access to lifetime income products in workplace retirement plans; 4. Preserve and improve access to professional financial guidance, education and information; and 5. Provide more resources to protect older Americans from financial exploitation. WHO IS IRI? The Insured Retirement Institute (IRI) is the leading association for the retirement income industry. IRI proudly leads a national consumer coalition of 40 organizations and is the only association that represents the entire supply chain of insured retirement strategies. IRI members are the major insurers, broker-dealers, distributors, asset managers, and 150,000 financial professionals. As a not-for-profit organization, IRI provides an objective forum for communication and education and advocates for the sustainable retirement strategies Americans need to help achieve a secure and dignified retirement. 1

50 2018 ADVOCACY BLUEPRINT Maintain And Enhance Current Tax Treatment For Retirement Savings 1. MAINTAIN TAX-DEFERRED TREATMENT FOR RETIREMENT SAVINGS The Tax Cuts and Jobs Act recognized the vital role tax deferred retirement savings plays in spurring America s economic growth and prosperity. By maintaining the tax-deferred treatment of retirement savings, Congress preserved the tools necessary to help Americans save for their retirement during their working years. Research conducted by IRI shows Americans would save less if tax deferral is reduced or eliminated. Congress should continue to promote the use of tax deferral for retirement savings to encourage more Americans to prepare and save for a secure retirement. 2. PROTECT THE CURRENT STRUCTURE AND DIVERSITY OF WORKPLACE RETIREMENT PLANS There are several types of workplace defined contribution retirement plans which consider the differences among workers in various employment sectors, such as the private, governmental, church, educational, and nonprofit sectors. The most prominent are 401(k), 403(b) and 457(b) plans. Proposals to consolidate these types of plans were considered for inclusion in the Tax Cuts and Jobs Act for purposes of simplification and consolidation. The final legislation maintained the distinct types and structures of retirement plans which were created to address the needs of distinct types of workers. Congress should continue to protect and maintain the current structure and diversity of workplace retirement plans. 3. PROVIDE FAVORABLE TAX TREATMENT FOR GUARANTEED LIFETIME INCOME IN RETIREMENT Distributions and withdrawals from guaranteed lifetime income products like annuities are currently taxed as ordinary income. However, these products provide significant social and economic benefits. By helping older Americans avoid outliving their assets, annuities reduce pressure on Social Security and similar programs. Congress should therefore create tax incentives such as a lower tax rate or an exclusion from taxation to encourage greater use of guaranteed lifetime income products. Expand Opportunities To Save For Retirement 1. REQUIRE EMPLOYERS TO OFFER RETIREMENT PLANS FOR WORKERS Most Americans are not saving enough for retirement because they do not have access to employment-based retirement savings plans. In fact, recent research has shown only 40 percent of full-time workers at small and medium-sized businesses have access to employment based 401(k) plans. To expand access for more Americans to have an opportunity to increase their savings for retirement, Congress should enact legislation such as the Automatic Retirement Plan Act of This bill would generally require all but the smallest employers to maintain a 401(k) plan and employees would be automatically enrolled (with the ability to opt out). It would also remove cumbersome legal and regulatory barriers which discourage employers from offering this benefit to their employees while preserving employer choice and maintaining protections for employers and their employees. 2

51 2018 ADVOCACY BLUEPRINT 2. ENABLE ALL SMALL BUSINESSES TO USE MULTIPLE EMPLOYER PLANS FOR THE BENEFIT OF THEIR WORKERS Small businesses face financial and administrative challenges, as well as legal risks, when offering a retirement plan to employees. As a result, many do not offer a retirement savings plan for their employees. Allowing small businesses to band together to achieve economies of scale and to delegate to a professional plan fiduciary responsibility for sponsoring the plan would facilitate their offering a retirement plan and would expand access to a workplace plan for more workers. This can be achieved by removing the restrictions on the types of employers that can band together in a Multiple Employer Plan (open MEPs), and by protecting employers who participate in a MEP and their employees from any negative consequences caused by the acts or omissions of other employers (the one bad apple rule ). Congress should enact legislation to expand access to MEPs, such as the provisions which have been included in the Retirement Enhancement and Savings Act of 2016, the Automatic Retirement Plan Act of 2017, the Retirement Security Act of 2017, Retirement Security for American Workers Act and the Small Businesses Add Value for Employees Act (SAVE) of In addition, given that lifetime income strategies greatly reduce the risk of outliving retirement savings, these plans should be required to make a lifetime income option available to participating employees. 3. INCREASE THE AUTO-ENROLLMENT AND AUTO-ESCALATION DEFAULT RATES Studies have shown that automatic enrollment is extremely successful in getting more people to save for retirement with participation rates at least 10 percentage points higher in plans with automatic enrollment (77%) than those without it (67%). Under current law, employers can automatically enroll employees in 401(k) plans and most private-sector employers set the default rate at 3 percent of pay. This is too low for adequate retirement savings. Research by EBRI has found that a 6 percent default savings rate would lead to significantly better retirement outcomes for workers without causing a marked increase in workers opting out of the plan. Workers across all income brackets are statistically more likely to participate when their employers have autoenrollment but will need higher savings thresholds to reach their retirement savings goals. Congress should increase the default deferral rate to 6 percent at the time of automatic enrollment and permit automatic escalation up to 15 percent. This proposal is part of several bills, including the Retirement Security Act of 2017, the Small Businesses Add Value for Employees Act (SAVE) of 2017, the Automatic Retirement Plan Act of 2017 and the Retirement Plan Simplification and Enhancement Act of ENHANCE THE START-UP CREDIT FOR SMALL EMPLOYERS RETIREMENT PLANS Under current law, small employers with up to 100 employees can receive an annual tax credit equal to 50% of the costs of starting a retirement plan, up to a maximum of $500 for three years. Unfortunately, this incentive is not having the desired impact. According to the Bureau of Labor Statistics, less than half of all workers at companies with fewer than 50 employees have access to an employer-sponsored retirement plan. Congress should therefore enact the Retirement Enhancement and Savings Act of 2016, the Small Businesses Add Value for Employees Act (SAVE) of 2017, the Automatic Retirement Plan Act of 2017, or similar legislation to make the start-up retirement credit available for the first five years and to increase the maximum credit to $5,000. 3

52 2018 ADVOCACY BLUEPRINT Increase Access To Lifetime Income Products 1. CLARIFY EMPLOYER FIDUCIARY RESPONSIBILITY FOR CHOOSING LIFETIME INCOME PRODUCTS Current regulations do not provide sufficient clarity about the steps employers must take to satisfy their fiduciary responsibilities if they want to make lifetime income products available to their employees. Employers should be permitted to give their employees access to lifetime income products provided by insurers that meet certain existing regulatory requirements enforced by state insurance regulators, such as capital and reserving standards. This can be achieved either through a Department of Labor rulemaking or Congressional enactment of legislation such as the Increasing Access to a Secure Retirement Act, the Small Businesses Add Value for Employees Act (SAVE) of 2017 and the Retirement Enhancement and Savings Act of ENABLE ANNUITY PORTABILITY Due to a technicality in the tax code, employees who invest in lifetime income options through an employment-based retirement plan would lose the guarantees associated with those investments if their employer changes recordkeepers. To avoid this result, many employers simply choose not to offer lifetime income options. Congress should enact the Retirement Plan Simplification and Enhancement Act of 2017 or the Retirement Enhancement and Savings Act of 2016, which include provisions to treat a recordkeeping change as a distributable event. This simple amendment will ensure workers are not harmed if their employer decides to make such changes. 3. REDUCE THE AGE REQUIREMENT FOR IN-SERVICE ROLLOVERS TO PURCHASE LIFETIME INCOME PRODUCTS Under Internal Revenue Service (IRS) rules, participants are required to wait until age 59 1/2 to purchase an annuity or other guaranteed lifetime income products. Congress should amend the Code to allow plan participants aged 50 and older to initiate special in-service rollover rules for the purchase of deferred income annuities. Allowing such purchases of deferred income annuities would help to facilitate greater access to lifetime income products for participants at an earlier age. 4. UPDATE REQUIRED MINIMUM DISTRIBUTION (RMD) RULES TO REFLECT LONGER LIFESPANS The Required Minimum Distribution (RMD) age was set in 1962 when life expectancies were considerably shorter than they are today. Workers today face an increased risk of outliving retirement assets because of longer lifespans. For a married couple age 66, there is a 66 percent chance of at least one spouse living to age 90, and 33 percent chance of at least one spouse living to 92. Congress should enact legislation such as the Retirement Plan Simplification and Enhancement Act of 2017 to increase the RMD age from 70 ½ to at least 75 and mortality tables should be updated to reflect longer life expectancies. 4

53 2018 ADVOCACY BLUEPRINT 5. REFORM THE RULES GOVERNING THE USE OF QLACS Current Treasury Department regulations governing qualifying longevity annuity contracts (QLACs) imposed certain limits on the exemption from the minimum distribution rules until payments commence which have prevented QLACs from achieving their intended purpose in providing longevity protection. The regulations limit the premiums an individual can pay for a QLAC to the lesser of $125,000 or 25% of the individual s account balance under the plan or IRA. These limits were included in the regulation because the Treasury Department lacked the statutory authority to exempt more than 25% of any account. Congress should enact legislation, such as that contained in Section 203 of the Retirement Plan Simplification and Enhancement Act of 2017, to provide the statutory authority the Treasury Department requires to enhance QLACs by easing the administrative challenges associated with rolling over funds to purchase a QLAC and increase the size of the exemption from the required minimum distribution (RMD) rules. 6. ALLOW BROADER USE OF LIFETIME INCOME PRODUCTS AS DEFAULT INVESTMENT OPTIONS Under the Pension Protection Act of 2006 (PPA), the Department of Labor (DOL) was directed to adopt rules to allow capital appreciation and/or capital preservation products to qualify as Qualified Default Investment Alternatives (QDIAs). However, the DOL regulations require that the product be transferable every 90 days. As a result, employers cannot provide their workers with capital preservation lifetime income products, leaving workers without access to guaranteed lifetime income. This is inconsistent with Congress s intent. Congress should enact legislation directing the DOL to revise the QDIA regulations by removing the 90-day transferability requirement, so employers can include lifetime income products for their workers. Help Savers Make Decisions About Their Finances 1. ADOPT A CLEAR, CONSISTENT AND WORKABLE BEST INTEREST STANDARD OF CARE FOR FINANCIAL PROFESSIONALS For nearly a decade, Congress and regulators at the federal and state levels have been working to formulate appropriate standards of conduct for financial professionals who provide personalized advice about investments and/or insurance to retail consumers. The Department of Labor (DOL) fiduciary rule, which took effect in part last year, is under review by order of the President, while the Securities Exchange Commission (SEC) and the National Association of Insurance Commissioners (NAIC) are developing their own proposals to establish a best interest standard for financial professionals who provide investment advice. Moreover, Congress and several state legislatures and regulators are considering or have introduced their own proposals. IRI and its members have long supported the principle that financial professionals should be required to act in their clients best interest when providing personalized recommendations. To avoid the creation of duplicative or conflicting rules, IRI urges all regulatory bodies including the SEC, the NAIC, the DOL, the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) to work constructively and collaboratively to develop a clear, consistent and workable best interest standard that will provide meaningful and effective consumer protections without depriving Americans of access to valuable financial products and services. 5

54 2018 ADVOCACY BLUEPRINT 2. REQUIRE LIFETIME INCOME ESTIMATES ON WORKERS BENEFIT STATEMENTS To save appropriately for retirement, workers should understand how much monthly income their nest egg could generate in retirement. Research by IRI found that more than 90 percent of workers want retirement income estimates and would find them helpful. Additionally, more than 75 percent of workers said they would increase their savings level after seeing these estimates. Congress should enact the Lifetime Income Disclosure Act (LIDA), which would direct the Department of Labor to adopt a rule requiring the inclusion of lifetime income estimates on benefit statements. This provision was also included in the Small Businesses Add Value for Employees Act (SAVE) of 2017 and the Retirement Enhancement and Savings Act of ADOPT A VARIABLE ANNUITY SUMMARY PROSPECTUS A variable annuity summary prospectus would improve consumers understanding of their investment choices and reduce regulatory burdens by streamlining disclosures to facilitate better decision making regarding lifetime income options. There is widespread support among investors for a shorter, more consumer-friendly prospectus. An IRI study found that 95 percent of investors would prefer a summary prospectus and six out of 10 individuals said they would be more likely to talk to their financial advisor about, and consider, a variable annuity if they had access to a variable annuity summary prospectus. IRI urges the SEC to move forward expeditiously to promulgate a summary prospectus for variable annuities. 4. ENCOURAGE ELECTRONIC DISCLOSURE FOR RETIREMENT PLANS Encouraging the use of modern electronic communication would have a direct and beneficial impact on workers and beneficiaries. Participants of all ages and incomes increasingly prefer to access information online, allowing them to more easily act on that information. According to the Progressive Policy Institute, the volume of printed disclosure is intimidating to workers and the static nature of printed documents does not invite the interactive engagement consumers need to manage their retirement portfolios appropriately. Congress should enact legislation, such as the Receiving Electronic Statements to Improve Retiree Earnings (RETIRE) Act, to permit electronic delivery to be the default option for providing required disclosures to plan participants, with an option to receive paper if desired. 5. IMPLEMENT THE NATIONAL INSURANCE LICENSING CLEARINGHOUSE With the passage of the National Association of Registered Agents and Brokers Reform Act (NARAB II) in 2015, focus shifted towards implementation of the law. NARAB II establishes a one-stop federal licensing clearinghouse for financial professionals holding state insurance licenses in multiple states. Financial professionals who have passed background checks in their home state will be able to apply for NARAB membership, enabling them to sell guaranteed lifetime income products in other states and reduce the regulatory burden of dealing with multiple state insurance licensing processes, while ensuring clients have access to a full suite of lifetime income options. The law maintains important consumer protections, retains states authority to regulate the marketplace, and improves consumer choice. To realize the benefits of this law, IRI urges the President to appoint NARAB s board and allow NARAB operations to begin as soon as possible. 6

55 2018 ADVOCACY BLUEPRINT Provide More Resources to Protect Older Americans from Financial Exploitation 1. ENABLE FINANCIAL ADVISORS TO PROTECT THEIR CLIENTS FROM FINANCIAL ABUSE With an aging population, it is critical to have rules in place to protect older Americans and other vulnerable adults from financial exploitation. It is also critical to have laws in place to encourage the reporting of suspected abuse by banks, credit unions, investment advisers, broker-dealers and insurance companies, as well as their employees. Congress should work expeditiously to enact the Senior $afe Act of 2017, which has also been included in the Financial CHOICE Act, the Economic Growth, Regulatory Relief, and Consumer Protection Act, and the HOME Act, all of which will serve to protect millions of older Americans who suffer financial exploitation each year, costing retirees at least $2.9 billion per year. 2. INCREASE FEDERAL APPROPRIATIONS TO STATE ADULT PROTECTIVE AGENCIES State Adult Protective Services (APS) agencies serve a critical role in the effort to protect older Americans against financial fraud and exploitation. Unfortunately, APS offices across the country are badly underfunded, leaving them without sufficient staff or resources to fully investigate all reports of suspected financial abuse. While these agencies are primarily funded by their individual states, funds can also be obtained through a variety of federal programs such as the Social Services Block Grant program, the Prevention of Elder Abuse and Neglect program, the Elder Rights Support Activities program, and the State Grants to Enhance Adult Protective Services program. Congress should enact legislation to increase the amounts appropriated to support these and other similar federal programs to ensure that state APS agencies have the resources they need to investigate and prosecute suspected abuse and exploitation of the growing population of older Americans. 7

56 N RP C RE THINK RETIREMENT NATIONAL RETIREMENT PLANNING COALITION National Retirement Planning Week 2018 DIGITAL TOOLKIT WHAT IS NATIONAL RETIREMENT PLANNING WEEK (NRPW ) 2018? National Retirement Planning Week is a national effort to help consumers focus on their financial needs in retirement. It s a week-long celebration and throughout National Retirement Planning Week, educational materials will be made available in conjunction with the week s agenda, and the National Retirement Planning Coalition will encourage retirement planning through nationally distributed print, radio materials, a coordinated media outreach program, and events throughout the week. What is the goal of National Retirement Planning Week? While National Retirement Planning Week events are concentrated during one week every year, the ideas and resources offered are intended to have a long-lasting impact. The goal is to promote the importance of comprehensive retirement planning. Despite developing trends that have made planning for and funding retirement more difficult it is still possible to Retire On Your Terms if comprehensive retirement plans are properly developed and managed. To support these educational and awareness efforts, the coalition maintains which features life-stage specific resources and tools to help Americans focus on their long-term financial goals. Why participate in National Retirement Planning Week? 1. Underscore your commitment to retirement and financial planning. 2. Demonstrate your support for advancing financial literacy. 3. Leverage significant media exposure throughout the week. 4. Increase online engagement with your target audiences. 5. Join numerous local, state, and federal public policymakers in promoting resources that help consumers. Who organizes National Retirement Planning Week? The week is organized by the National Retirement Planning Coalition a group of prominent education, consumer advocacy and financial services organizations, which recognizes that the need to help Americans plan for retirement is an ongoing effort. The coalition, spearheaded by the Insured Retirement Institute, is committed to educating Americans about the importance of retirement planning and is determined to make this a national priority. When is it taking place? National Retirement Planning Week is held annually in April. This year the celebration will occur April 9-13, Where can I find more information? Insured Retirement Institute (IRI) 1100 Vermont Ave. NW, 10th Floor Washington, DC (202)

57 N RP C RE THINK RETIREMENT NATIONAL RETIREMENT PLANNING COALITION National Retirement Planning Week 2018 Theme: THINK RETIREMENT 1. Develop a Retirement Plan and Save 2. Learn the Basics of Financial Planning 3. Consider Consulting a Financial Professional KEY MESSAGE In 2018, National Retirement Planning Week will continue to promote awareness of the need to comprehensively plan for retirement and encourage Americans to plan for their future financial needs. This year our theme focuses on how consumers can Rethink Retirement and learn new tips and strategies to help them prepare for their retirement journey. National Retirement Planning Week is an opportunity for everyone to get involved and raise awareness. Contact John Jennings, Government and Public Affairs Specialist for more information at jjennings@irionline.org. DEVELOP A PLAN AND SAVE LEARN THE BASICS OF FINANCIAL PLANNING CONSIDER HIRING A FINANCIAL PROFESSIONAL Developing a plan is the first step toward a financially secure future. The next step is to commit to saving. Saving as early as possible is the key to success. Waiting until later in life requires much heftier saving over a shorter period of time and may even require working more years. In general, experts recommend saving 10% to 20% of income, depending on your age and the number of years until retirement. Retirement planning and preparedness are at critically inadequate levels, with studies showing the majority of Americans lack any kind of retirement savings strategy. Learning the basics of investment and what options are best for you are important to your financial future. Many consumers who are unsure about where to start may benefit from developing a retirement income plan with the help of a trusted, qualified advisor. A knowledgeable advisor will help you define life goals, identify risks you may face, and establish the right financial picture. Insured Retirement Institute (IRI) 1100 Vermont Ave. NW, 10th Floor Washington, DC (202)

58 N RP C RE THINK RETIREMENT NATIONAL RETIREMENT PLANNING COALITION KEY FACTS & FIGURES regarding consumer retirement perceptions How prepared are Americans for retirement? BABY BOOMERS Only Only Only 54% 18% 40% GENERATION X 73% 58% have money saved for retirement accurately estimate the percentage of their income that may be required to pay for health care have tried to calculate how much they need to save in order to retire have saved less than $150,000 haven t tried to calculate how much they need to have saved by the time they retire Sources: Boomer Expectations for Retirement 2017 (April, 2017), Don t You (Forget About Means): Third Biennial Study on the Retirement Readiness of Generation X The importance of a financial advisor for holistic retirement planning 90% OF BABY BOOMERS who work with a financial professional have retirement savings. $100K in savings 78% Have saved $100,000 or more for retirement with help of a financial professional $100K in savings 58% Have saved $100,000 or more for retirement not using a financial professional More than 8 in 10 Boomers who work with a financial professional feel they are better prepared for retirement as a result of that relationship. GENERATION X Among GenXers only 3 in 10 work with a financial professional, but those that do are twice as likely to have saved $100,000 or more for retirement. Sources: Boomer Expectations for Retirement 2016 (April, 2016), Don t You (Forget About Means): Third Biennial Study on the Retirement Readiness of Generation X (March 2016) How important is lifetime income? Defined benefit pensions provide more than 50% OF LIFETIME INCOME for more than 4 IN 10 retirees. Only 1 in 4 BABY BOOMERS expect to receive lifetime retirement income from a pension, and 85 percent say it is important to have a source of guaranteed lifetime income other than Social Security. But, FEWER THAN 1 in 10 say they would use a portion of their savings to purchase an annuity. Sources: Boomer Expectations for Retirement 2017 (April, 2017), It s All About Income: Inaugural Study on the American Retirement Experience (September, 2016) Do men feel more prepared than women? Women express a higher level of concern about both saving enough for retirement, and being able to afford their desired lifestyle in retirement, than men do. More than 40% 50% Concerned about saving enough for retirement More than 30% 50% Concerned about affording desired lifestyles Sources: Women s Perspectives on Saving, Investing, and Retirement Planning (November, 2015) Insured Retirement Institute (IRI) 1100 Vermont Ave. NW, 10th Floor Washington, DC (202)

59 N RP C RE THINK RETIREMENT NATIONAL RETIREMENT PLANNING COALITION SUPPORTERS of NRPW National Retirement Planning Week is brought to you by The National Retirement Planning Coalition (NRPC). The NRPC is composed of prominent financial industry and advocacy organizations dedicated to raising the public awareness of the need for holistic retirement planning. The Coalition, led by the Insured Retirement Institute, is comprised of the following members: America Saves American Academy of Actuaries American Benefits Council American Council of Life Insurers (ACLI) American Institute of Certified Public Accountants (AICPA) American Savings Education Council (ASEC) Association for Financial Counseling and Planning Education (AFCPE) Association of Ohio Life Insurance Companies (AOLIC) Center for Retirement Research at Boston College Colorado Department of Regulatory Agencies (DORA) Defined Contribution Institutional Investment Association (DCIIA) Employee Benefit Research Institute (EBRI) Federal Citizen Information Center (FCIC) of the U.S. General Services Administration Financial Industry Regulatory Authority (FINRA) Investor Education Foundation Financial Services Institute (FSI) Financial Services Roundtable (FSR) Insured Retirement Institute (IRI) Iowa Insurance Division Life Insurance Association of Michigan (LIAM) Life Insurance Council of New York, Inc. (LICONY) LIMRA LOMA Secure Retirement Institute Louisiana Department of Insurance MANA, A National Latina Organization (MANA) Minnesota Department of Commerce Mississippi Department of Insurance National Academy of Social Insurance (NASI) National Association for Fixed Annuities (NAFA) National Endowment for Financial Education (NEFE) National Foundation for Credit Counseling (NFCC) NICSA Securing Mi Financial Future, Michigan DIFS Society of Actuaries Texas Association of Life and Health Insurers (TALHI) The American College The Aspen Institute Wisconsin Council of Life Insurers (WCLI) Women s Institute for a Secure Retirement (WISER) WorldatWork Insured Retirement Institute (IRI) 1100 Vermont Ave. NW, 10th Floor Washington, DC (202)

60 N RP C RE THINK RETIREMENT NATIONAL RETIREMENT PLANNING COALITION NRPW SOCIAL MEDIA CHANNELS & WEBSITE In order to achieve maximum outreach and efficient information sharing we will use our social media platforms and website for outreach and engagment with our stakeholders. NRPW HASHTAGS: #NRPW18 #RethinkRetirement #ROYT #IRI RetireOnYourTerms Like the RetireOnYourTerms page on Facebook to stay informed and share updates. Use the hashtags #NRPW18 #RethinkRetirement #NRPW #IRI. RetireOnYourTerms Follow us on Use the hashtags #NRPW18 #RethinkRetirement #NRPW #IRI. Check out our website to take our National Retirement Planning Week Pledge and to find out more information on activities, participating organizations, media, and consumer resources for holistic retirement planning. Insured Retirement Institute (IRI) 1100 Vermont Ave. NW, 10th Floor Washington, DC (202)

61 N RP C RE THINK RETIREMENT NATIONAL RETIREMENT PLANNING COALITION NRPW RESOURCES National Retirement Planning Week (NRPW) materials are accessible at: under our Action Center section List of helpful materials: NRPW Toolkit 2018 Sample Op-ed News Release Newsletter Copy List of NRPC Members Social Media Tiles Web Banner GIF Banner/Button NRPW PRESS AND MEDIA More information on NRPW Press and Media can be found on our website under Media section. Don t forget to share your NRPW press releases and other media mentions with Government and Public Affairs Specialist, John Jennings, at jjennings@irionline.org. We will publish the NRPW Pre-Press Release with supportive information about NRPW events and activities on March 15. We would kindly ask you to share it with others. NRPW TEAM For more information with regard to NRPW press and media, please contact: John Jennings Government and Public Affairs Specialist jjennings@irionline.org (202) Matthew Martinez Digital Marketing Manager mmartinez@irionline.org (202) Insured Retirement Institute (IRI) 1100 Vermont Ave. NW, 10th Floor Washington, DC (202)

62 NATIONAL RETIREMENT PLANNING WEEK ONE MINUTE Mr. / Mme. Speaker: I rise today in recognition of the National Retirement Planning Coalition. Under the leadership of the Insured Retirement Institute, the National Retirement Planning Coalition is committed to engaging all Americans in a national conversation on the importance of retirement planning. With rising healthcare costs, longer life spans, and a reduction of pension offerings, more Americans than ever before are shouldering the burden of financing and managing their savings for retirement entirely by themselves. Despite these developing trends, the National Retirement Planning Coalition seeks to guide all Americans towards securing a dignified and secure retirement through holistic planning. To highlight their efforts, each year the Coalition sponsors National Retirement Planning Week, which will take place this year during the week of April 9 th through the 13 th. During the week, Coalition members will be participating at educational events, publishing research, and sharing resources, all aimed at helping America s consumers and financial professionals to think about and prepare for their retirement years by developing and executing long-term financial strategies. Mr. /Mme. Speaker, there are steps we all can take to achieve financial independence and security in our retirement years. By participating in National Retirement Planning week, we have the opportunity to engage in a national dialogue about the importance of preparing and planning for retirement. I encourage my colleagues to join with me and the National Retirement Planning Insured Retirement Institute (IRI) 1100 Vermont Ave. NW, 10 th Floor Washington, DC (202)

63 Coalition to participate in the week s activities to inform and educate Americans all across the nation to take some time out of their busy schedules during the week and think about their retirement years, review their retirement plans if they have one and if they do not have one, then take some time to make a plan for their retirement which can help them enjoy their retirement years. Insured Retirement Institute (IRI) 1100 Vermont Ave. NW, 10 th Floor Washington, DC (202)

64 MONTH DAY, 2018 Ms. Catherine Weatherford President and CEO Insured Retirement Institute 1100 Vermont Avenue NW, 10 th Floor Washington, DC Re: National Retirement Planning Week 2018 Dear Ms. Weatherford: Developing a comprehensive retirement plan is a vital first step on the path to a financially secure future. However, many Americans are under-prepared for the financial challenges they may face in their retirement years. With this in mind, there must be a national conversation on the importance of retirement planning. By encouraging Americans to conscientiously prepare for their retirement years, we can significantly enhance financial security in the United States. National Retirement Planning Week is an essential campaign, raising awareness of these important issues. By providing Americans with helpful information, they can make informed decisions regarding their finances. The National Retirement Planning Coalition s efforts to educate American consumers on retirement planning are commendable. My best wishes as you continue this valued campaign. Sincerely, [SIGNATURE] MEMBER OF CONGRESS STATE, DISTRICT

65 National Retirement Planning Week 2018: WHEREAS, retirement planning was once thought of as an issue for older, wealthier adults to deal with, the truth is that preparing for a secure future is no longer considered a life stage or income-specific endeavor; and WHEREAS, each day about 10,000 Baby Boomers who are members of a generation largely unsure of their financial future are about to enter their retirement years; and WHEREAS, providing for financial wellness in our later years is now an individual responsibility; and WHEREAS, preparing for and financing one s retirement is now increasingly difficult, with more Americans shouldering the burdens themselves, and WHEREAS, a unique set of challenges has emerged, including changes in employee benefits, longer life spans, uncertainty with Social Security and Medicare, as well as rising cost of health care; and WHEREAS, there is a growing need to educate Americans on retirement planning; and Insured Retirement Institute (IRI) 1100 Vermont Ave. NW, 10 th Floor Washington, DC (202)

66 FOR IMMEDIATE RELEASE Contact:XYZ April XX, 2018 (555) National Retirement Planning Week Urges for National Conversation INSERT NAME/ORGANIZATION Joins Effort to Promote Retirement Planning INSERT CITY, STATE WHERE FILING The National Retirement Planning Coalition, comprised of the predominant financial education, consumer advocate, and financial services organizations, has declared April 9-13 National Retirement Planning Week. In recognition of the national conversation needed on retirement savings, INSERT ORGANIZATION NAME issued the following statement. We appreciate how daily life and the pressures of speculating on the future can make planning for retirement appear daunting. However, opportunities exist to calm these apprehensions, said INSERT EXECUTIVE TITLE-NAME. Simple things, such as being proactive and routinely assessing your financial preparedness for retirement, are fantastic first steps towards achieving a financial secure and dignified retirement Additionally, the guidance of financial professionals will also help you to achieve your goals. The National Retirement Planning Coalition, spearheaded by the Insured Retirement Institute, recognizes the need to educate Americans on retirement planning and is committed to making this a national priority. National Retirement Planning Week and other Coalition activities demonstrate that it is possible to Retire On Your Terms. To support these education efforts, the coalition has collected the latest resources to help consumers and financial professionals focus on long-term financial goals. These tools are available year-round at To support the efforts of the Coalition, INSERT ORGANIZATION NAME will be INSERT ORGANIZATION ACTIVITIES HERE. INSERT ORGANIZATION BOILERPLATE HERE -- END INSERT ORGANIZATION BOILERPLATE 1100 Vermont Avenue, NW, Tenth Floor Washington, D.C

67 WHEREAS, carving some time out on a routine basis to review your finances and assess you financial preparedness for retirement is an achievable first step; and WHEREAS, being proactive about planning and seeking professional guidance when warranted can help Americans achieve financial freedom; and WHEREAS, crafting a holistic financial plan for retirement can restore confidence and build savings for those post-working years; and WHEREAS, experts from the National Retirement Planning Coalition, the group that organizes National Retirement Planning Week are urging Americans to use this time to develop, review and/or revise their retirement plans with the tools and help available at NOW, THEREFORE, BE IT RESOLVED, that (State, City, Department, Agency) does hereby proclaim the week of April 9 to 13, 2018 National Retirement Planning Week ; and BE IT FURTHER RESOLVED, that (State, City, Department, Agency) supports and joins in this national effort to help consumers focus on their financial needs in retirement. Insured Retirement Institute (IRI) 1100 Vermont Ave. NW, 10 th Floor Washington, DC (202)

68 National Retirement Planning Week 2018: Stock Op-Ed The National Retirement Planning Coalition, comprised of prominent education, consumer advocacy, and financial services organizations, recognizes the need to educate Americans on retirement planning and is committed to making this a national priority. While retirement planning was once thought of as an issue for older, wealthier individuals, the truth is that preparing for a secure future is no longer considered an income-specific endeavor only pursued by those about to enter their golden years. Providing for financial wellness in our later years is now an individual responsibility, and the earlier you start, the better off you ll be. From students to grandparents, there are steps, both large and small, that we can be taking at every phase of life to empower ourselves for the future we envision. The first step we all should take towards achieving financial independence in our retirement years is the simplest: rethinking what we think we know about retirement preparedness. To spread this message, the National Retirement Planning Coalition is organizing National Retirement Planning Week April Through the release of educational materials during a national media-outreach campaign, comprised of print, radio, and social media spots, the National Retirement Planning Coalition is urging Americans to #RethinkRetirement and #RetireonYourTerms. Below are just a few ideas to mull over while following along with National Retirement Planning Week. Students Children watch, absorb, and imitate the actions of the adults around them and money management is no different. The saving and spending habits they witness early on form lasting impressions on how they handle their own money in the future. Something as simple as putting spare change in a jar can send a great message to developing minds about setting money aside. Similarly, raising financially-literate teenagers will set them up for retirement planning success. Parents can help them understand the basics of budgeting, saving smart, and working toward a financial goal. From the money received as a birthday gift, to the part-time job income earned at the local grocery Insured Retirement Institute (IRI) 1100 Vermont Ave. NW, 10 th Floor Washington, DC (202)

69 store, teenagers need to understand what to do with the money they have in their hands before it burns a hole in their pockets. In Your 20s Once you reach your 20s, you have more control over your income and what to do with it. While your life as a financial independent adult is just beginning, complete with an actual salary and benefits, that salary is likely going to be on the lower side. Combined with student loan debt and full living expenses, having developed money management and saving skills as a child are essential to maintaining financial independence. While retirement seems to be a long way off, it s easy to move financial planning to the side--and credit cards to the front. The younger you are, however, the more savings power you have thanks to compound interest. A few dollars saved today can mean thousands of dollars later, and time is very much on your side. Manage your credit wisely, set a practice of saving before you spend, and get the jump on retirement planning that so many wish they had had. In Your 30s & 40s Kids. A mortgage. Minivan payments (even though you said you d never get one ). As you continue to build your credit, your family, and your life, there seems to be no shortage of bills to pay. Saving seems to be even more challenging at this stage of the game. How can you think about retirement when your toddlers don t even sleep through the night? However, your earning power is on the rise! Your good financial habits have led to great credit, better interest rates when you do have to borrow money for the big stuff, and your employer likely offers a retirement savings plan at work. During this mid-career life stage, it s a good time to set a retirement savings goal, and enlist the help of a financial professional to help you reach it. In your 50s & 60s During your 50s, your life becomes less about the kids (who are more independent or out of the house altogether) and more about you. You can focus more on your career and put more energy into what you want, both for today and for the future. If you haven t already, decide on your planned retirement age; determine if your savings is adequate or on track; and tackle any retirement planning catchup you may need by accelerating your saving and investing. Insured Retirement Institute (IRI) 1100 Vermont Ave. NW, 10 th Floor Washington, DC (202)

70 In your 60s, you can finally see retirement on the horizon. The time has actually come to plan that trip to Italy; to meet that first grandchild; and to downsize from that big house. The time has also come to better research your Social Security benefits (and when it s best to start accessing them), Medicare coverage and long term care options. In your 70s & Beyond You ve made it! You have retired with financial security and a lifetime of memories. Now it s time to make sure you protect what you ve achieved for the people you love. Take your will out of the filing cabinet and ensure it is up to date and still reflects your intentions. Name a power of attorney, and settle any inheritance or taxation concerns you may have with a professional. More importantly it s time to enjoy your retirement, and because of your diligence, retirement is going to be one more adventure. National Retirement Planning Week 2018 may be the opportunity you need to get back on track with your financial goals. Now that you ve been presented with some items to think about, please visit which features life-stage specific resources and tools to assist Americans achieve their long-term financial goals, and keep an eye out for additional ways to #RethinkRetirement during National Retirement Planning Week. Insured Retirement Institute (IRI) 1100 Vermont Ave. NW, 10 th Floor Washington, DC (202)

71 POSITION STATEMENT OCTOBER 2017 RETIREMENT INCOME OPTIONS in Employer-Sponsored Defined Contribution Plans THE AMERICAN ACADEMY OF ACTUARIES SUPPORTS POLICY AND EDUCATIONAL INITIATIVES THAT INCREASE THE AVAILABILITY OF RETIREMENT INCOME OPTIONS within employer-sponsored defined contribution (DC) plans. Such options, based upon actuarial principles such as longevity pooling and other risk mitigation strategies, can help retirees manage their financial security over their remaining lifetime. Retirement income options could improve retirement security for millions of Americans by providing more predictable income in retirement; some solutions can also relieve retirees of the burden of managing investments, a task for which many may not be well-equipped. By taking advantage of longevity risk pooling and institutional pricing beyond what may be available in the individual market, employer-sponsored DC plans can offer these options in a cost-effective manner. By offering retirement income and longevity risk management options in DC plans, employers can give working Americans additional tools to enhance their retirement security and financial wellbeing. The American Academy of Actuaries supports this goal through the development of related solutions, tools, policies, and education and stands ready to assist policymakers in their development. The Value of Retirement Income Options There is a clear public interest in broad retirement security across the population. Historically, defined benefit (DB) plans were a key component of employer-provided retirement benefits, under which the employer made all or most of the contributions, investments were managed by the plan sponsor, and benefits were provided as guaranteed lifetime income. By pooling the longevity risk of its employees, an employer s contributions could be efficiently converted into lifetime income for employees by assuming the average life expectancy for the group of employees as a whole benefits that were not paid to those who did not live as long as expected were available to pay to those who lived longer than expected. AMERICAN ACADEMY OF ACTUARIES 1850 M STREET NW, SUITE 300, WASHINGTON, D.C

72 POSITION STATEMENT With the shift to DC plans as the primary, and in many cases, the only source of employerprovided retirement benefits, participants typically receive benefits in the form of a lump sum of the accumulated account value at retirement. This requires individuals to manage their own lifetime income, investment, and longevity risks. The Actuaries Longevity Illustrator (jointly sponsored by the American Academy of Actuaries and the Society of Actuaries) shows that the likelihood of any one individual living much longer than his or her life expectancy is significant. Without longevity risk pooling, an individual planning for this possibility would need to plan for a longer-than-average lifetime and potentially have significantly less monthly income in retirement. Similarly, without the benefit of institutional pricing, the costs to provide the desired level of income would be greater (or equivalently, the amount of income that could be obtained with a fixed account balance would be smaller). Needed Solution Although there is no single solution to the challenge of Americans retirement financial security, DC plan participants could benefit from lifetime income or longevity management options with respect to at least a portion of the account balance. These options could be permitted or encouraged through guidance from the Department of Labor (DOL) and provided by employers, insurance companies, fund managers, and others. One of the principal risks in managing retirement income longevity risk is that income might not last a lifetime. An annuity option that provides a lifetime income a specified income as long as the retiree lives addresses this risk precisely. Such an approach not only provides longevity protection but also typically relieves the retiree of investment risk. Another approach to lifetime income is an option to withdraw specified amounts or percentages of the account balance annually; however, the retiree bears some risk that the assets may be depleted or the amount of the income may be unpredictable. These structured withdrawal programs, although not specifically incorporating longevity risk pooling, can include features that provide cost-effective flexibility and income management, such as periodic re-evaluation and adjustment, discipline, and institutional pricing. Safe harbors, enabling legislation, and other regulations are needed to cover areas such as selecting providers, developing solutions, educating employees, and implementing income strategies to minimize plan sponsor fiduciary concerns. Providers and employers will need to partner to develop appropriate solutions and educate employees about the options and opportunities available to them. Although the DOL currently offers safe harbor guidance for including annuities within DC plans, many plan sponsors believe the guidance still exposes them to some fiduciary risk and, consequently, have not taken advantage of this guidance. There are currently no DOL safe harbors governing structured withdrawal programs. Clear safe harbors could encourage more employers to include income options within DC plans. RETIREMENT INCOME OPTIONS IN EMPLOYER-SPONSORED DEFINED CONTRIBUTION PLANS

73 POSITION STATEMENT Benefits of Income Options in DC Plans Although retirees can obtain the income options described above by rolling DC accumulations into individual retirement accounts (IRAs), there are significant benefits to making the options available inside employer-sponsored DC plans. Some of these benefits include: Pricing efficiency. Employers that maintain DC plans have access to institutionally priced financial products and services. The lower costs provide greater net benefits. Ease of transaction. A retirement income option can be elected without the need to perform an IRA rollover or seek out potential providers. Provider and product due diligence. Plan fiduciaries are capable of providing thorough due diligence beyond that which an individual is capable of performing. This scrutiny can help minimize poor choices in provider selection, product selection, and strategy implementation. Guidance on retirement income planning and longevity risk management options. While some employees may have external financial advisers to help them through the decision process, many individuals do not have this support nor the financial literacy to analyze the choices on their own. Employer- or plan-provided educational materials and tools could efficiently fill this gap. The American Academy of Actuaries is a 19,000-member professional association whose mission is to serve the public and the U.S. actuarial profession. For more than 50 years, the Academy has assisted public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries in the United States. AMERICAN ACADEMY OF ACTUARIES 1850 M STREET NW, SUITE 300, WASHINGTON, D.C American Academy of Actuaries. All rights reserved. RETIREMENT INCOME OPTIONS IN EMPLOYER-SPONSORED DEFINED CONTRIBUTION PLANS

74 Retirement Readiness A Comparative Analysis of Australia, the United Kingdom & the United States October 2017 RETIREMENT READINESS: A Comparative Analysis 1

75 Retirement Readiness A Comparative Analysis of Australia, the United Kingdom & the United States Executive Summary Retirement Readiness